The people's voice of reason
The people's voice of reason
The average salary in the U.S. is $63,795, according to the latest data from the Social Security Administration. How your salary compares will depend on your industry and skilI set, as you'd expect. What you might not realize is that your salary is also greatly influenced by where you live, since salaries go hand in hand with the cost of living.
SoFi takes a closer look at the average salary in the U.S. and how income varies from state to state.
Key points
The national average salary is $63,795. That is the sum of all incomes divided by the number of workers. Where someone lives, their industry, education level, and current demand for that job all contribute to how much a worker earns per year.
Quick tip: Online tools make tracking your spending a breeze: You can easily set up budgets, then get instant updates on your progress, spot upcoming bills, analyze your spending habits, and more.
The Bureau of Labor Statistics, or BLS, provides data on median pay. As of Q4 2023, the median weekly earnings of full-time workers was $1,145, or $59,384 per year. The median is the midpoint in the data set, with 50% of incomes falling above that figure, and 50% below.
Why are the average and median income figures different? With averages, unusually high or low numbers can skew the results. For instance, billionaires might drive the average higher than what the typical worker actually makes. The median is less affected by outliers.
Click here for a chart that shows both the average and median income (in single income households) in each state, according to data from Forbes and BLS.
The chart shows that the average salary in some states is quite different from the average salary nationwide. That's partly because the cost of living, which affects how much a company pays its employees, varies significantly by state. (Also, inflation impacts states to varying degrees.)
In addition, industries with a concentrated presence in certain states—such as banking or automobile manufacturing—can affect the overall quality of job opportunities in that area.
Salaries tend to be higher in some areas of the country. Cities on the West Coast and in the Northeast have some of the highest average salaries:
Remember, while these states have higher incomes, they may also have a much higher cost of living and higher housing prices.
The South is home to states that tend to pay the least:
To determine your personal cost of living, try tracking your expenses with a free budget app for a few months.
It's important to remember that just because a state has a higher average salary, that doesn't mean it's more profitable for workers to live there. Higher salaries tend to correlate with a higher cost of living.
Before making a major move, first try living below your means. One reason that people who make more money still have trouble paying their bills is the phenomenon of lifestyle creep. This is when your so-called needs expand to consume your current salary.
One of the most effective ways to counteract lifestyle creep is to downsize your home. Reducing your housing expenses to less than 30% of your gross income can help you pay down debt, increase savings, and become more conscious of how lifestyle choices affect spending.
Quick tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.
The average annual average salary in the U.S. is $63,795. The median annual salary, which is often less skewed by outlying numbers, is $59,384. It's worth noting that average and median salaries vary quite a bit by state. States in the Northeast and West Coast tend to pay higher salaries, while those in the South often pay less. What's stopping people from moving to a higher paying state? Often, it's housing prices, which rise along with the cost of living in "richer" states.
How much do the top 10% of Americans make per year?
The top 10% of Americans earn $173,176 per year. Some top earners live in higher cost of living areas, so it can be more revealing to see how much the top 10% earn in your state.
What percentage of Americans make over $75K?
Only 12.3% of Americans make in the $75,000 to $99,999 range. An additional 16.4% make between $100,000 and $149,000. However, a large portion of Americans (16.2%) earn in the $50,000 to $74,999 range.
Which U.S. state has the highest salary?
Massachusetts is the state with the highest annual income of $76,600. This salary is significantly more than the national average salary of $63,795.
Reader Comments(0)